Outsourcing is not a bad thing. It allows companies to focus on their core competencies and let others do the rest. But there are some unintended consequences. When companies outsource processes to low-cost labor, they lose the motivation to modernize the process.
Handcraft can be of value. You can argue that a handmade leather purse or a piece of pottery is nicer than a machine-made one. But a hand-processed invoice?! I don’t think you’d find much beauty there.
When we outsource invoice processing, we settle for a short-term -fix rather than challenge ourselves to innovate. That’s when BPO becomes detrimental to long-term success. We are settling for cost reduction rather than process improvement.
I recently made some comments about Basware that were somewhat critical. It was positive, constructive criticism. I wanted to point out that Basware was ideally placed to become a monster. With one of it’s largest competitors sidelined somewhat by their acquisition by SAP, Basware could fall into the trap of becoming complacent – indeed, I have , from personal experience seen hints of this on the horizon.
But I overlooked something – something that to an observer from outside of their organization could go unnoticed. It is the astonishing turn-around that Basware has performed, the foresight they have shown making that change and the energy and determination they have exhibited in completing it.
You wait for ages without meeting any then two turn up at once.
I had a rush of reacquaintances some time ago. I met Mike Zealley, a former colleague from KPMG with whom I had the pleasure of working very closely about 15 years ago. After a stint elsewhere he’s now a partner at KPMG doing great things leading a Public Sector practice. Not long after, I met Roberto Moretti, CEO Europe of Oxygen Finance, for the first time. His first words to me were “Mike Zealley sends his regards.” Roberto had just come from a meeting with Mike and he’d mentioned he was seeing me. But before Roberto and I got down to business, I spotted another familiar face in the Oxygen Finance offices - Mark Hoffman, formerly of lots of businesses but most notably Sybase and CommerceOne. I last met him in 2000 at a CommerceOne event in Berlin.
It felt like it was a trend. Things were coming round in full circle. Bumping into old colleagues and business acquaintances was almost to be expected but then nothing. For ages I didn’t bump into any one – until last Friday when I bumped in to two at the same time.
This week we’re delighted to welcome a new sponsor, Nipendo, to Purchasing Insight.
Nipendo is fairly new on the P2P scene but in the five or so years that they’ve been about they’ve already made quite an impact with an impressive customer list which includes HP, IBM, Motorola, Pfizer and Office Depot.
I was excited to speak to Nipendo’s CEO, Eyal Rosenberg, a couple of weeks ago – I wanted to know what makes Nipendo’s proposition stand out from the crowd. We covered a lot of ground but the thing that stood out for me was the concept of E2E-invoicing. At first, I was a little skeptical but as Eyal explain more, enhancing his explanation with case study examples, the Nipendo vision became clearer.
Sometimes, great ideas just never take off because some prerequisite solution to a problem hasn’t been solved. E-procurement was a great idea in the 1990’s but until the internet was ubiquitous and trusted, it was slow to take off. Looking back, the trust and ubiquity grew quite quickly but in 1996, if we had a crystal ball that said it would take the best part of a decade to become an established way of doing business, I wonder whether we’d have given up. We didn't know that the problem was trust and ubiquity until it was solved.
Do you recognize this business? They are a market leader. They have a significant - perhaps largest market share in their industry. Everyone knows their brand. They recruit the best people and their brand looks great on a CV. They have the confidence to know that they can retain their market share and still win business without having to compete on price.
Can you tell who I'm thinking of? Here's a few more characteristics.